"What happens is when you can't sell what you want to sell, you sell whatever you can to raise money, including your grandmother's necklace," Cashin said on "Squawk on the Street." "Those kinds of forced liquidations tend to spill over."

A bond default from a Chinese solar company last week shook markets and rattled copper prices, which are used for loan collateral in China. The credit worries added to concerns about a slowing Chinese economy.

Traders will also monitor the tense situation between Ukraine and Russia, said Cashin, UBS' director of floor operations at NYSE. He added that economic sanctions against Russia would not bode well for the stock market.